i) Payments or Transactions on Which Withholding Tax Is Applicable:

Withholding tax is typically deducted at the point of payment by a person or entity making specific payments to others. The following are examples of payments where withholding tax is applicable:

1. Payments to Contractors and Subcontractors:
   Withholding tax is deducted on payments made to contractors and subcontractors for work done or services rendered. The applicable rate depends on whether the contractor is resident or non-resident.
2. Interest Payments:
   Withholding tax is deducted on interest paid by financial institutions, except on interest from government securities. The rate for residents is 8%, while non-residents are subject to a higher rate.
3. Dividend Payments:
   Dividends paid by a company to its shareholders are subject to withholding tax. The rate is 8% for residents, while non-residents may be subject to different rates depending on double taxation treaties.
4. Payments for Professional and Consultancy Services:
   Fees paid to professionals, consultants, lawyers, and other service providers for services rendered attract withholding tax. The rate is 7.5% for residents and 15% for non-residents, unless reduced by treaty provisions.
5. Rent Payments:
   Rent payments made for the use of land or buildings are subject to withholding tax. The rate is 8% for residents.

ii) Payments or Transactions Exempt from Withholding Tax:

Certain payments and transactions are exempt from withholding tax under Ghanaian tax law. These exemptions are typically in place to encourage specific activities or prevent double taxation. Examples include:

1. Payments Made to Exempt Persons or Entities:
   Payments made to exempt persons, such as government ministries, agencies, and non-profit organizations that enjoy statutory tax exemptions, are not subject to withholding tax.
2. Payments on Government Securities:
   Interest earned on government bonds, treasury bills, and other government securities is exempt from withholding tax.
3. Payments to Free Zone Enterprises:
   Income earned by companies operating in free zones during their tax holiday period is exempt from withholding tax on payments such as dividends, interest, and rent.
4. Payments for the Supply of Goods and Services Below the Threshold:
   Withholding tax does not apply to payments for goods and services if the total payment falls below the withholding tax threshold (usually GH¢500 for goods and GH¢2,000 for services).
5. Employee Salaries:
   Salaries paid to employees are subject to personal income tax (PAYE) and are not subject to withholding tax as a separate payment.

Conclusion:
Withholding tax serves as a key tool in tax administration, ensuring that tax is collected at the source on various payments. However, certain payments, such as those made to exempt entities, on government securities, and to free zone companies, enjoy exemptions to promote specific economic activities or prevent undue tax burden.